US Crude Approaches $49, Hits Two-Month High

Oil futures are surging midweek as new data show US crude stockpiles fell for the fourth consecutive week. Oil prices have been gaining momentum over the last two trading sessions, buoyed by reductions to crude exports by Russia and the United Arab Emirates (UAE) and Nigeria implementing a production freeze.

September West Texas Intermediate (WTI) futures rose $0.79, or 1.65%, to $48.66 per barrel at 16:36 GMT on Wednesday on the New York Mercantile Exchange. US crude prices are trading at their highest levels since June 1 and are poised to top $50.

Brent, the international benchmark for oil prices, is also rallying midweek. September Brent crude futures surged $0.72, or 1.43%, to $50.92 a barrel on London’s ICE Futures exchange. Brent, too, is trading at its highest levels since the beginning of June.

The increase in oil prices is driven by the decline in oil domestic crude supplies. According to the US Energy Information Administration (EIA), domestic crude stockpiles dipped by 7.2 million barrels for the week ending July 1, beating initial forecasts of 2.5 million barrels. Gasoline stockpiles tumbled by one million barrels, while distillate stockpiles plunged 1.9 million barrels. Domestic production also took a slight hit as US output slipped 19,000 barrels per day (bpd) to 9.41 million bpd.